Orangeburg County credit ratings cut as Fitch flags fund pressure
Orangeburg County in South Carolina faces a lower credit profile after a downgrade tied to pressure on its general fund and weaker financial resilience. The Negative Outlook signals added risk as the county continues supporting non-general funds and deals with delayed audits that have led the state to withhold funding.
Highlights
- Fitch Ratings downgraded Orangeburg County's IDR to 'BBB-' from 'BBB' and its 2017 bond rating to 'BB+' from 'BBB-', with a Negative outlook.
- Audit filing delays have led the state to withhold funding, increasing fiscal stress as the county uses general funds to support non-general fund operations.
- Despite 'High Midrange' budgetary flexibility, Fitch assesses Orangeburg County's 2024 demographic and economic level indicators as 'Weakest' on a composite basis.
Downgrade reflects fiscal strain and audit delays
As reported by Fitch Ratings, the agency has downgraded Orangeburg County, South Carolina's Issuer Default Rating to 'BBB-' from 'BBB' and cut the county's series 2017 installment purchase revenue bond rating to 'BB+' from 'BBB-'. The outlook remains Negative.Fitch says the IDR downgrade primarily reflects a negative Additional Analytical Factor for Contingent Risks, linked to ongoing general fund support for various non-general funds and a 'bb' financial resilience assessment. The agency also cites below-average demographic and economic trend and level metrics, alongside a 'Weak' long-term liability assessment.
The lower 'BB+' rating on the installment purchase revenue bonds reflects what Fitch describes as a slightly higher degree of optionality because installment purchase payments remain subject to appropriation. Fitch adds that execution risk remains elevated as the county draws down general fund balances in an effort to make other funds self-supporting.
Weak demographic indicators add to credit pressure
Fitch says continued delays in audit filings have resulted in the state withholding funding, adding further pressure to the county's finances. That constraint compounds the challenge of stabilizing operations while using general fund resources to support other parts of the county's budget structure.Under Fitch's Local Government Rating Model, Orangeburg County's Model Implied Rating is '
Latest Fitch Ratings News
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